Tata Motors market share eroded from legacy products: Mistry

Mumbai, Dec 9 (IANS) Seeking support from shareholders of Tata Motors Ltd (TML), ahead of December 22 extra-ordinary general meeting, Tata Sons’ ousted Chairman Cyrus P. Mistry on Friday said the company had legacy passenger car product lines, which had a large negative contribution, eroding market share and brand perception.

In his representation to shareholders, which comes ahead of the extra-ordinary general meeting that have been called by the auto maker to remove him as its director, he also said: “The existing product pipeline of auto makers needed a great deal of work, to ensure we had aspirational products going into the future.”

“..we had some legacy passenger car product lines which had a large negative contribution and suffered from large discounts in the market place, further eroding market share and brand perception,” he said, adding that during the last four years, the market has become significantly competitive, with over 5 MNCs launching over 50 new products, but TML launching only 2 new products, the Bolt and Zest, which were an evolution of the past design language.

“Apart from the product portfolio issues, TML suffered from issues relating to quality and service responsiveness, all having an adverse impact on the Brand. In this period, major new players strengthened their position with re-engineered products specifically designed for the Indian market,” he said in his letter.

On commercial vehicles business, he said that the business also had many “challenges including a significantly higher level of competitive intensity” from industry players, but the product gaps, which were a result of underinvestment in the past, are being bridged and this will augur well for the company in the future.

In the passenger car segment, the company will soon unveil its new platform strategy which will ensure competitiveness and access to the latest global technology, he said.

Mistry further said there was high attrition in sales force and dealer profitability was under pressure, leading to poor customer engagements. “Initiatives were put in place to expand the network aggressively over time, with renewed focus on high demand centres,” the letter said.

Commenting on the auto maker’s British arm Jaguar Land Rover (JLR), Mistry said JLR is at a critical juncture.

“The decisions taken today will decide its future resilience. The company faces many challenges, but also many opportunities. The strategy at JLR has been to achieve scale as well as minimise currency and supply chain risks by investing in new facilities,” the letter added.